In the sixth of a series of features answering the biggest questions about the industry's future, Christopher Dring explains why publishers must work with – not against – the trade-in market.
Should we kill off pre-owned?
The debate over used game sales has raged for years.
On one side, developers argue that second-hand has killed their back catalogue businesses.
On the other, retailers argue it's because of trading-in that gamers can afford the next big 40 release.
Two years ago the row over pre-owned resulted in publishers utilising tactics to dissuade customers from buying used games – particularly, asking used game buyers to pay an additional fee to access online content. The latest suggestion is that the next generation of consoles will come with technology that will disable pre-owned titles entirely.
This is not a good idea. For starters, retailers' obsession with pre-owned is not born out of greed, but necessity. Blockbuster's UK commercial director Gerry Butler told MCV only last month that without pre-owned, specialist games retailers ‘would not survive.'
But most importantly, consumers like trading in. It gives value to their game catalogue and allows them to better afford an expensive hobby.
Yet there are ways for publishers to curtail the ‘overuse' of pre-owned.
Retailers like selling second-hand goods because the margins are higher than that of new titles. In some of the more competitive markets like the UK, new game sales can often generate no profit at all.
If new games could be made more profitable, then retail won't need to rely on pre-owned. One suggested new model is that stores only pay for the cost of manufacturing upfront, with the rest of the money paid after the game is sold.
Another way to deter pre-owned is to spread out new releases. There is a triple-A game out almost every week during the Q4 period. And worst of all, many of them are aimed at the same 18 to 34 male audience.
Even the more affluent gamers can't afford to buy them all, so trading in becomes the only option for them. For these consumers the trade-in market acts as a sort of rental system.
If publishers were to spread out releases throughout the year, then it would reduce users' need to trade in their old games.
The pre-owned issue isn't going to disappear overnight. Yet if publishers and retailers could work together to make the new boxed games market more profitable and more affordable to consumers, then the market's reliance on second-hand may start to wane.